A LENNOX Head surfer has told of his frightening experience after being circled by a large shark while surfing at Seven Mile Beach this morning.

Surf instructor Dave Sharp had only just paddled out into the surf and was about 100m out when the when the shark surfaced from the murky depths between him and a group of about six others.

"We saw it sort of cruise underneath us and then come directly up with its mouth open," he said.

"It was quite big, I was on a nine foot (long) board and it was definitely longer than my board."

Mr Sharp said the shark surfaced three or four more times, coming "straight up" with its tail emerging from the water and thrashing about.

"We didn't know what to do because it was so close," he said.

"We weren't worried at first because we thought it was just chasing something, but then it wasn't going anywhere."

At the same time a woman on the beach apparently spotted the shark and started shouting frantically and waving her arms.

Mr Sharp said he did his best to stay calm and advised everyone in the water to form a group and paddle in together, slowly.

"Our main concern was there was a little girl out there with her father on a small board but he got her in very quickly," he said.

He described the water conditions as murky, with "zero visibility" and lots of seaweed.

Once the group had paddled in, Mr Sharp walked up the beach towards the flags at the clubhouse and warned every swimmer on his way about the shark sighting.

He then informed the lifeguards who evacuated some 30-40 swimmers between the flags before closing the beach.

A Surf Life Saving NSW spokeswoman said the lifeguards also contacted the drone team who used multiple drones with alarms to warn several other surfers still in the water.

The drone team were able to get to the location within two minutes, and after warning surfers started looking to the north and south where the witness had described seeing the creature.

The drones patrolled for 45 minutes but did not spot the shark.

The beach was reopened just after 10am.

Taking to Facebook after the experience, Mr Sharp wrote that it was "good to be alive" after the ordeal.

"It's a strange feeling paddling back in wondering if it's following you but happy to say everyone is safe and on land now."

Mr Sharp said because surfers were often first to sight sharks, he believed it was important that they report any sightings immediately and inform everyone around them.

The veteran surf instructor speculated that the shark could have been a thresher shark, which are not considered dangerous and have a distinct predatory traits which include thrashing their long tails near the surface.